ICANN For Beginners

Causes of ICANN

Despite being famously decentralized and un-hierarchical,
the Internet relies on an underlying centralized hierarchy built into the
domain name system (DNS). Domain names (such as "icannwatch.org") are
the unique identifiers that people depend on to route e-mail, find web
pages, and connect to other Internet resources. The need to enforce uniqueness,
that is, to prevent two people from attempting to use the exact same domain
name, creates a need for some sort of body to monitor or allocate naming.
However, control over the DNS confers substantial power over the Internet.
Whoever controls the DNS decides what new families of "top-level" domain
names can exist (e.g., new suffixes like .xxx or .union) and how names
and essential routing numbers will be assigned to websites and other Internet
resources.

When the Internet was small, the DNS was run by a combination
of volunteers, the National Science Foundation (NSF), and U.S. government
civilian and military contractors and grant recipients. As the paymaster
for these contractors, the U.S. government became the de facto ruler of
the DNS. The Internet's exponential growth placed strains on the somewhat
ad hoc system for managing the DNS, and what had been primarily technical
issues became political, legal, and economic problems that attracted high-level
official attention. In particular, as attractive domain names in .com began
to become scarce, disputes over attractive names became increasingly common,
and pressure mounted for the creation of new "top-level" domain suffixes
such as .shop or .web. Although technically trivial to implement, the proposals
ran into intense counter-pressure from intellectual property rights holders
who already faced mounting problems with cybersquatters-- speculators who
registered domain names corresponding to trademarks and held them for profit.
Meanwhile, other governments, notably the European Union, began to express
understandable concern about the United States' control of a critical element
of a global communication and commercial resource on which they foresaw
their economies and societies becoming ever-more dependent.

Formation of ICANN

ICANN is formally a private nonprofit California corporation
created, in response to a summoning by U.S. government officials.

In June 1998, the US Department of Commerce (DoC) and
an interagency task force headed by Presidential Senior Adviser Ira Magaziner
responded to concerns about the DNS system with the Statement
of Policy on the Privatization of Internet Domain Name System, known
as the DNS White
Paper. Embracing the rhetoric of privatization, the DNS White
Paper called for the creation of a private nonprofit corporation to take
over the DNS and institute various reforms.

Shortly thereafter, an international group, after meeting
in secret, incorporated ICANN as a private nonprofit California corporation.
After some negotiation, DoC lent ICANN much of its authority over management
of the DNS.

ICANN's First Two Years

In its first two years of life, ICANN has made a number of
decisions with potentially long-term effects.

ICANN pushed Network Solutions, Inc. (NSI), the monopoly
registry and dominant registrar, to allow more competition
among registrars. Most people seem to think this was a good thing.

ICANN also instituted mandatory arbitration of trademark
claims. ICANN's
"Uniform Dispute
Resolution Policy" (UDRP) requires every registrant in .com, .org,
or .net to agree to arbitration before ICANN-selected arbitration providers
if any trademark owners anywhere in the world feel aggrieved by their registration
of a term similar to that trademark. The UDRP is very controversial
-- trademark holders argue it does not go far enough; civil liberties groups
argue that the design of the system violates basic norms of due process,
and that the arbitrators are not acting fairly enough.

Contrary to its early promises that half of its Board of
Directors would be elected from an at-large membership, ICANN announced

Most recently, ICANN identified seven
new gTLDs to be added to the root. It declined to recommend 35
others. The selection process was very
controversial, and some of the losing applicants protested
In theory, the losing 35 may be considered later, depending on the experience
with the first seven; ICANN, though, hasn't committed to a date for considering
a second round.

Why Worry?

Democratic theory suggests that the absence of accountability
tends to breed arbitrariness and self-dealing. In addition to avoiding
governmental accountability mechanisms, ICANN lacks much of the accountability
normally found in corporations and in nonprofits. Ordinary corporations
have shareholders and competitors. ICANN does not because it is nonprofit
and has a unique relationship with the Department of Commerce. Many nonprofit
organizations have members who can challenge corporate misbehavior. ICANN
has taken steps to ensure that its "members" are denied such legal redress
under California law. All but the wealthiest nonprofits are constrained
by needing to raise funds; ICANN faced such constraints in its early days,
but it has now leveraged its control over the legacy root into promises
of contributions from the registrars that have agreed to accept ICANN's
authority over them in exchange for the ability to sell registrations in
.com, .org and .net, and from NSI, the dominant registrar and monopoly
.com/.org/.net registry, which agreed to pay $2.25 million to ICANN this
year as part of agreements hammered out with DoC and ICANN.

The result is a body that, to date, has been subject to
minimal accountability. Only DoC (and, in one special set of cases, NSI
or registrars) currently has the power to hold ICANN accountable. NSI currently
has no incentive to use its limited power, and DoC has nothing to complain
of so long as ICANN is executing the instructions set out in the White
Paper. The accountability gap will get worse if DoC gives full control
of the DNS to ICANN. But it should be noted that opinions may differ as
to whether DoC could legally give away its interest in DNS to ICANN without
an act of Congress. It is likewise unclear what precisely "giving away
control" would consist of beyond DoC's interest in its contracts with the
maintainer of the root, since the most important part of anyone's "control"
over the root is publishing data that other parties, many of whom are independent
of the government, choose to rely on.